Foodtech startups defaults to old recipe for success

Investors have started 2018 with a healthy appetite for food-tech startups after going slow in 2016 and 2017. Last week, Zomato received $150 million in funding from Alibaba’s Ant Financial, and Swiggy raised $100 million from South Africa’s Naspers and Chinese e-commerce company Meituan-Dianping last month. Cab aggregator Ola acquired Foodpanda for about Rs 40 million a few months ago to take on UberEats.

Orders have crossed 4,50,000 a day for food delivery startups and they’ve tightened their belts— they’re now looking forward to a feast after the funding famine of the past few years.

“In 2014-15, the food tech area noticed excessive euphoria and many individuals jumped on the bandwagon solely to expertise excessive misery in 2016. Now, the market is stabilising as entrepreneurs are specializing in core points slightly than banking on sentiment,” says serial entrepreneur and founding father of Development Story Ok Ganesh, who has invested in Freshmenu and Hungerbox.

This chance is the draw for founders and buyers. The web meals ordering business grew at 150% year-on-year with an estimated gross merchandise worth of $300 million in 2016.

“India is, without doubt, one of the essential markets for UberEats and is the quickest rising market in Asia-Pacific,” mentioned Bhavik Rathod, head, UberEats India, which has 7,000 restaurant companions throughout the nation.

It’s been a tough street for the startups that survived the funding famine of 2016, they usually now specializing in expertise and effectivity.

Fatigue units in rapidly amongst prospects. “If you’re constructing a meals model, you should make sure you maintain the romance alive by innovating,” says Ganesh. That’s why firms are creating new merchandise and experiences reminiscent of loyalty programmes, which Zomato, FreshMenu and Swiggy have launched.

“The thought of membership golf equipment is to lift extra enterprise from present purchasers, flip them into model ambassadors, and have them create new prospects,” mentioned Rashmi Daga, founder, FreshMenu.